How to Apply CRM Software to Grow Customer Relationships


  • Customer Relationship Management is a business strategy to grow mutually beneficial and profitable customer relationships at scale. It's essential because achieving customer affinity is one of only four sustainable competitive advantages.
  • Prosperous relationships are a leading indicator to increased customer purchases, referrals, customer lifetime value and retention; all factors that deliver significant revenue growth.
  • Growing relationships systemically and at scale does not occur by happenstance. It only occurs pursuant to a framework. Here is a 3-step framework we've developed over many years and has been consistently effective.
Johnny Grow Revenue Growth Consulting

For many companies implementing Customer Relationship Management (CRM) software, the initial goal is to get the application live as fast as possible. They want to get staff using the software, get customer data organized, and get management the sales pipeline or other essential reports.

It's a good start. But it's only a start. At this point the CRM software is probably not designed to improve relationships with customers. Consider the below questions.

  • What customer objectives will now be satisfied due to the new CRM system and how will that increase revenue for the company?
  • Does your application insert every customer into a customer segment so that they receive more relevant, personalized and contextual engagement from the company?
  • Does your system deliver a 360-degree customer view that includes the customer's purchase history, customer insights, digital footprints and social profile?
  • Does the application show which 20% of your customers contribute about 70% of your profits, and which 5-10% contribute negative profits, and recommend how you lift unprofitable customers to become profitable?
  • Does it report each customers Customer Lifetime Value (CLV) so you can methodically increase customer share?
  • Does it calculate account health scores so you can see at-risk customers, automatically apply retention levers and lower customer churn?

These are only a few examples showing what CRM can do but quite often doesn't.

Advance from Customer Data Management to Customer Relationships

CRM software has the data management, process automation and information reporting to systemically grow profitable client relationships at scale. It can then achieve the downstream benefits of increased customer acquisitions, improved customer share and decreased customer churn.

But growing profitable relationships is not a function of technology alone. It requires the integration of a customer strategy, the alignment of customer and company objectives, the design of processes to achieve those objectives and the technology to automate and measure those processes.

Fortunately, the technology provides the underlying infrastructure for all the needed components to grow client relationships at scale.

Here is a 3-step process to show how this can be done.


Start with a CRM Strategy

Your CRM strategy shows how the CRM technology will bring together and coordinate your customer strategy, business processes and information reporting to achieve slated customer and business outcomes.

Consider the importance of each of these components.

  • Your customer strategy defines how you sell to, satisfy, serve and solve for the customer.

Customer strategies have defined processes built on customer engagement, customer service and delivering customer experiences. They have their own metrics to verify they are meeting customer and company objectives.

When done well, they provide company-wide uniformity and deliver consistent customer experiences regardless of which person, department or channel engages the customer.

Many companies don't have a formal or understood customer strategy. Instead, people are left to their own discretion to do the right thing. Whatever that is. This approach can work for companies with high performance cultures, but that's rare, which is why companies without a structured customer strategy most often fail to deliver year over year improvements to customer share and retention.

  • Customer facing business processes make or break the customer experience. Technology can automate these processes. However, that's only a benefit if the processes are effective. Bad processes that deliver inconsistent or poor customer experiences are not helped by technology.

Informal or undefined processes, or many varied processes, can work for small groups, but they can't scale. The also don't work when a team member leaves, you need to reallocate tasks to other staff, you need to insert a substitute for time away, or you grow your total team.

Customer facing processes should be designed for effectiveness, then streamlined, then made efficient and then automated with technology, in that order. Formal processes not only deliver repeatable outcomes and quality results, but they also create confidence and trust.

"Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”  —W. Edwards Deming

  • The goal of information reporting is to get the right information to the right person at the right time so they can improve a customer interaction or make a better decision. That means you need to know what information is most useful in these scenarios before you can apply technology.

Also recognize CRM software offers hundreds of reports that never get used. Even the reports that are reviewed often fail to drive performance improvements. To do better, you need to shift information from being merely interesting to being actionable. That can be done by delivering data-driven and fact-based insights that answer important questions or shifting reporting from backward to forward looking. Reporting should also include key metrics with comparison points, such as industry benchmarks, to provide a relative ranking of what's working and what needs improvement.

The best reporting changes behaviors or actions to impact business outcomes. It displays forward looking analytics and shows the financial impact of both action and inaction. It's this level of reporting that shifts information visibility from hindsight to foresight. It's also this level of reporting that connects performance metrics with prescriptive guidance, such as next best action, contextual recommendations and links to Playbooks.

Technology can advance information reporting along a continuum, from descriptive reporting to diagnostic reporting to predictive reporting and finally to prescriptive reporting. But to be effective, all reporting must measure the right outcomes with the right metrics. Only then can reporting bring immediate attention to variances, so that staff or management can quickly intervene before the deviations exacerbate.

Defining and coordinating each of the prior components does not occur by happenstance. It occurs pursuant to a plan that shows how CRM software facilitates their integration and achievement. That plan is your CRM strategy.


Target Customer and Business Outcomes

Most companies don't improve relationships with customers because they prioritize what's important to the company far ahead of what's important to the customer. Many times they are unable to align company and customer objectives because they lack customer-centricity or just don't know what's most important to their customers.

Sure, pretty much all companies say they are customer centric. Who is going to admit otherwise? But customers tell a different story, and say that most companies are really self-centric, product-centric or much more internally focused than externally aligned with them.

A revealing study from Bain & Company found that 80% of companies believe they deliver "superior experiences," however, the research showed only 8% of customers agreed (Source: Bain & Company, Customer-Led Growth diagnostic questionnaire, n = 262).

To do better, you must start with an outside-in perspective, view your company as customers view it and really know what customers want in order to increase their patronage with your business.

Here's how that can be accomplished from different parts of your company.

  • Marketers should seek to engage customers in ways they want to be engaged. That starts by recognizing customers are not homogenous. Marketers must first identify their Ideal Customer Profile (ICP), then allocate accounts into customer segments and finally apply customer intelligence at every customer interaction. They can deliver personalized, relevant and contextual engagement by target audience and persona. They can align content with the buyer journey, engage on customer preferred channels and promote brand relevancy.
Ideal Customer Profile
  • The salesforce should shift from overt selling to solving for the customer. The best sellers know that a sale will only be made if they solve their customer's pain. This approach also creates differentiation among competitors who simply pitch products.

Sellers must also recognize that in the digital era where buyers self-educate online and content is plentiful, their role has changed. A wide body of research shows that buyers complete about two-thirds of their buy cycle using online content to down select a vendor short list.

Buy Cycle Phases

Only then do they reach out to sellers. That means the salesperson role has changed and the seller must be prepared engage with late-stage insights and shift from telling to collaborating and co-creating. Sale methodologies such as Challenger Sale model are designed for just this purpose.

  • Customer Service must satisfy customer inquiries, cases and complaints. They must remedy challenges and problems and above all, keep customers happy and coming back for more.

They must know what customers want to achieve and apply low friction, low customer effort support methods to achieve those goals and deliver on-target service at the least cost. And to achieve continuous improvement they must measure customer satisfaction for their services using CSAT (Customer Satisfaction), NPS (Net Promoter Score) or other scoring method.

But all that is easier said than done. A proliferation of new channels, devices and consumer technologies on top of increasingly demanding customers and a competitive marketplace can make setting contact center priorities a difficult and fluid exercise.

That why CRM for the contact center evolves pursuant to progressive strategies and software capabilities. Below is an illustration showing the progression.

Customer Service CRM Performance Levels

One More Thing — Stop being Presumptuous

From three decades of CRM implementation experience, I can share that almost all of my client executives have told me they know what their customers want. And almost all of them are partially correct.

Unfortunately, their inaccuracy lies in dated analysis, anecdotal occurrences, personal bias or simply projecting their own preferences and ideas onto their customers. In the wise words of Mark Twain, "What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so."

Even small inaccuracies result in major degradation of personalized messaging, relevant offers, sales proposals, product innovation and so much more. CRM systems can use Voice of the Customer (VoC) programs to replace intuition and guesswork with firsthand information from customers.

VoC programs capture, categorize and prioritize customer goals, expectations, preferences and dislikes. This data feeds your customer 360-degree view so that customer expectations and insights are easily accessible in one place and can be used by any customer facing staff person for an improved customer experience.

Voice of the Customer Data Transformation

VoC also delivers the input to improve your products and services. When customers share their goals, pain points, complaints and what they care about, they are advising how to improve or create innovative products and services. It's the best market research that money can't buy.

Feedback is a gift. Knowing what customers like and don't like about your company, products and services is an invaluable source information for innovation, customer acquisition programs, customer growth campaigns and customer support services.

With VoC can you discover what is most important to your customers and design the products, services and experiences to satisfy them and increase their business.

Failing to give customers what they want creates an open invitation for them to find a competitor that will.

On the flip side, knowing what customers most want and architecting CRM software to meet or exceed those objectives will accelerate revenue goals such as higher margin repeat purchases or cost savings goals such as lower cost to serve or higher staff productivity.


Schedule The Journey

How do you eat an elephant? One bite at a time.

Or maybe better said by Mark Twain, the secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, then starting on the first one.

Systemically scaling improved client relationships is more of a dream than a vision for most companies. It's not that they don't want to satisfy, serve and solve for customers, it's that they don't have a road map to get there.

The below progression model is a road map built on a phased maturity model. It illustrates how each part of the company advances their CRM software to advance the company's customer relationships.

Customer Relationship Progression

It recognizes that you can't do everything at once and therefore takes a phased approach. It provides an overarching plan with long-term visibility but can be consumed one item at a time. Because it's holistic, CRM programs and capabilities can be logically assembled to show prerequisites, relationships and cumulative effect.

Each phase will also align the designated CRM advancements with performance metrics to measure progress in customer satisfaction (CSAT), customer lifetime value (CLV), customer retention and other criteria that demonstrate continuous improvements.

When your advancements are designed holistically, each accomplishment delivers a slated business outcome and financial result, and quite often a by-product that advances the next objective. The combined effect reduces time and cost and dramatically improves ROI.

The Point is This

Technology alone doesn't improve relationships any more than putting a new engine in your car makes you a better driver. But technology can orchestrate the combination of customer strategy, customer facing business processes and information reporting that are needed to systemically improve customer relationships at scale.

CRM software can be engineered to achieve prioritized and measurable objectives, aligned with customer journeys, joined with streamlined business processes and continuously measured and adjusted. But these things don't occur on their own. They occur pursuant to a CRM strategy.

You can implement CRM software without an accompanying strategy, but the effort becomes aimless, progress is questionable, payback is incalculable, and you are never sure where the finish line is.

What normally happens is the objectives slip from strategic to tactical, such as getting data into a system, measuring staff activities or producing a pipeline report – possibly valid goals – but do little to nothing to improve client relationships or contribute to the company's business priorities.

And if your CRM software doesn't improve your relationships with customers, well then, you miss the point of Customer Relationship Management.

But when CRM strategy creates the linkage from the software to the most important business outcomes, it makes CRM something the company can't live without – which makes it both wildly successful and sustainable.

See the 3 step process to use CRM software to grow customer relationships and the downstream benefits of increased customer acquisitions, customer share and customer retention.

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